By Anora Mahmudova, MarketWatch

10-year U.S. Treasury yields at 1.728%

Long-dated Japanese bond prices rose on Tuesday, pushing the yield on the country's benchmark 10-year bond into negative territory for the first time ever.

U.S. Treasury yields, meanwhile, were little changed after falling sharply in early Asia trade.

Japan's 10-year bond is yielding a negative 0.027% after falling 5 basis points on Tuesday. Meanwhile, the Japanese yen strengthened against the dollar (http://www.marketwatch.com/story/the-yen-has-crossed-a-critical-line-in-the-sand-2016-02-09), which tumbled to below Yen115 for the first time November 2014.

The fall in the dollar against the yen has more to do with the diminishing prospects of any future rate hikes in the U.S. rather than Japan's monetary policy, according to Peter Boockvar, chief market analyst at The Lindsey Group LLC.

"The dollar has strengthened a lot over the past year in an anticipation of rate hikes this year, but it looks increasingly unlikely that the Fed will do that given how weak our economy is," Boockvar said.

"The higher probability of not seeing another 25 basis-point rate hike in the U.S. had more impact than the 10 basis-point cut in deposit rates in Japan last week," Boockvar said.

The Bank of Japan last week cut its bank deposit rates to negative 0.1% with strategist suggesting that the move was intended to weaken the currency and stimulate the economy.

Read:Five questions Janet Yellen must answer (http://www.marketwatch.com/story/five-questions-janet-yellen-must-answer-2016-02-09)

Japanese bond yields began falling sharply last week, but the currency has strengthened instead, creating further headache for policy makers.

Treasury yields fell sharply in early Asia trade but recovered by the U.S. day, leaving yields little changed.

"The severity of the recent moves have extended oversold conditions in stocks and overbought condition in Treasurys, creating a dynamic which points to the need for a meaningful correction," wrote David Ader, head of government bond strategy at CRT Capital, referring to multiday rally in Treasurys.

On Tuesday, the yield on the 10-year Treasury note -- the Treasury market's benchmark -- declined less than a basis point to 1.728%, after posting the largest one-day decline since July 6 on Monday. Treasury yields have dropped more than 50 basis points since the start of the year to the lowest level since Feb 2, 2015.

Boockvar said 10-year yields could fall further and that the 1.38% level should be watched carefully, as it was the lowest level for Treasury yields on intraday basis, set in 2012.

"We will need to see some stabilization in oil prices and a pickup in inflation for 10-year yields to stop falling," he added.

Read:Oil industry woes grow as storage levels hit 'critical level' (http://www.marketwatch.com/story/oil-industry-woes-grow-as-storage-levels-hit-critical-level-2016-02-08)

The yield on the 30-year bond , known as the long bond, rose 2 basis points to 2.571% from 2.559% on Monday. The yield on the two-year note rose 3.2 basis points to 0.694% from 0.662% on Monday.

In Europe, the benchmark 10-year German yield rose 1.8 basis points to 0.234% from 0.216% on Monday.

(END) Dow Jones Newswires

February 09, 2016 15:38 ET (20:38 GMT)